INVESTMENT IN AFFILIATE

12 Months Ended

Dec. 31, 2015

7.	INVESTMENT IN AFFILIATE

CCA has a 50% ownership interest in APM, an entity holding the management contract for a correctional facility, HM Prison Forest Bank, under a 25-year prison management contract with an agency of the United Kingdom government. CCA has determined that its joint venture investment in APM represents a variable interest entity (“VIE”) in accordance with ASC 810, “Consolidation” of which CCA is not the primary beneficiary. The Forest Bank facility, located in Salford, England, was previously constructed and owned by a wholly-owned subsidiary of CCA, which was sold in April 2001. All gains and losses under the joint venture are accounted for using the equity method of accounting. During 2000, CCA extended a working capital loan to APM, which has an outstanding balance of $3.5 million as of December 31, 2015.

For the year ended December 31, 2015, equity in losses of the joint venture was $126,000. For the years ended December 31, 2014 and 2013, equity in earnings of the joint venture was $720,000 and $78,000, respectively. The equity in losses and earnings of the joint venture is included in other (income) expense in the consolidated statements of operations. As of December 31, 2015, CCA’s investment in APM was $0.1 million and is reported in other assets in the accompanying consolidated balance sheets. The outstanding working capital loan of $3.5 million, combined with the $0.1 million investment in APM, represents CCA’s maximum exposure to loss in connection with APM.